Annonce
Annonce
Annonce
News in english

Sw. franc loans draining councils

10 months after the government stopped councils from taking loans in Swiss francs, 26 councils still have them. 22 councils have dropped them – but with major losses.

Gem til liste

Danish local councils are counting their losses following speculation in Swiss franc loans that has cost them dear.

In 2012 alone, 22 local councils have cleared or refinanced expensive loans that in the case of 12 of them has given a total loss of DKK210 million.

Although the controversial loans were banned in February, some 26 councils still have them according to a Politiken survey of 95 of Denmark’s 98 councils. Just over half of the councils have at some time tried to speculate in Swiss franc loans or swaps.

Economy and Home Affairs Minister Margrethe Vestager says she is pleased that so many councils have refinanced the loans, adding that the new rules determine that in future council loans must be in Danish kroner or euros.

In all, councils took out Swiss franc loans totalling DKK5.8 billion, falling for the temptation to take out foreign currency loans that were cheaper than Danish loans at the time.

“As a council you look at all the possibilities in order to increase your funds,” says Sorø Council Mayor Ivan Hansen, whose council lost DKK7.8 million when the financial crisis made Swiss franc loans more expensive.

Fredensborg Council in North Zealand is one of the councils that is hanging on to its loans – and like others in the same situation is holding its breath, hoping for the loans to become cheaper.

Others have chosen to cut their losses straight away. Lolland Council, for example has lost a total of DKK120 million.

CBS Economy Professor Finn Østrup says the ban that is now in place may not be enough, and perhaps councils should be prevented from flirting with alternative financing.

“A council’s job is to provide welfare. That is drains and kindergartens and not advanced financial instruments entered into with financial institutions,” Østrup says.

Vestager agrees, saying councils should not be creative in handling their finances.

“Perhaps (they should be) less ambitious in how advanced things should be. The more advanced they are, the more difficult it becomes for counsellors to understand,” she says.

FACEBOOK – Follow Politiken’s News in English

PolitikenPlus
  • Kirsebærtræ Kan noget i naturen være så lyserødt? Kan livet? I Danmark er farven på de japanske kirsebærtræer næsten surrealistisk i april.

    Pluspris 1.650 kr. Alm. pris 1.900 kr. Køb
  • Trøje til ham Varm, klassisk og anvendelig striktrøje til ham. Trøjen er med rund hals, og er lavet i en fin garnkvalitet af marinould . Den er produceret i Italien, og bag mærket Room No. 101 står Klaus Samsø.

    Pluspris 549 kr. Alm. pris 699 kr. Køb
  • Winemakers Dinner Smag på 8 udvalgte vine fra nogle af de bedste og mest spændende områder i Spanien med masser af point fra Penin. Og nyd en tilhørende Rasmus Bo Bojesen menu kreeret så mad og vine matcher hinanden.

    Pluspris 850 kr. Alm. pris 1.250 kr. Køb
  • Brændeholder Få styr på brændestablen med denne brændeholder med tilhørende opsamlingsbakke i stål. Holderen er lavet i pulverlakeret stål, og måler 60 x 42 x 31 cm.

    Pluspris 679 kr. Alm. pris 800 kr. Køb
  • Rasmus Bjerg Solo Så er det her! Showet verden har ventet på. Nu får du endelig Rasmus Bjerg helt alene!

    Pluspris 150 kr. Alm. pris 275 kr. Køb